The Kenya Revenue Authority (KRA) has lost a case in which it was seeking to recover Ksh2.3 billion from Doshi Ironmongers.
In a ruling by High Court judge Patrick Otieno on Wednesday, October 14, KRA was barred from pursuing a Ksh2.3 billion tax debt in a battle that has lasted for 10 years.
The court also directed the taxman to pay Doshi Ksh2 million as the cover for violation and infringement of its constitutional rights.
The judge further noted that his ruling was not exempting Doshi from paying taxes to KRA as outlined in the constitution.
“This however does not amount to a prohibition against the respondents (KRA) from ever collecting tax due from the petitioner, that statutory mandate must be executed but done in compliance with the statutes and the Constitution,” he stated.
The judge also blamed the taxman for taking too long with its investigations.
“The court takes the view that expeditious execution of public duty is now an indispensable norm and that a period spanning more than 10 years can never be deemed reasonable for the purpose of conducting investigation,” he added.
The battle backdates to 2010 when KRA first issued a demand letter to the company in what it termed as tax dues.
Soon after, the steel manufacturer issued a protest after claiming that the taxman illegally seized its property in 2003 and 2007.
It was revealed that the taxman had carried out several raids at the company where they carted away most of their properties.
The blow comes as KRA struggles to hits its annual targets with wide margins.
The taxman missed its 2019 half-year tax collection target by Sh88.3 billion, netting Sh857.8 billion over the period ending in December.
